Cardboard Containers Limited - Case Study Example

Name Professor Institution Course Date Introduction Cardboard Containers Limited, a manufacturing organization, has three warehouses located in areas around United Kingdom. One of the warehouses located in Blackburn has recently declined. Because the rate of production has reduced many resources get wasted. To help increase the turnover rate in the warehouse a good project has to be set and thus competent project management skills must be employed. The objective of the management of the warehouse is to utilize all the available resources, increase the level of production while maximizing profits. This requires commitment, skill and effort from both the managers and the other workers in the warehouse. In order to achieve its objective, managers of the warehouse have to set up an effective project and come up with the project management tool. This project s intended to salvage the situation of Blackburn warehouse before it collapses. This also requires that employees are well acquainted with the company’s vision in order to know their goal. When the goal is well communicated, working at the objectives is easy. Before coming up with the project aimed at improving the company’s condition, the manager will need to have an assessment of the company’s external environment. This involves looking at the trends in the market in order to make the necessary changes to the operation of the warehouse. This helps improve the value of their products. The manager will also look at the opportunities in the field have not been exploited, thus taking advantage of this opportunities in order to improve on sales which in the long run will lead to increase in production. While taking advantage of opportunities one needs to look at the threats facing the industry and try to devise ways to avoid these threats. After looking at the external environment then the internal environment needs to be assessed. This involves the strengths and weaknesses of the warehouse and the company in general. This is achieved by looking at the previous budgets to see how company resources had been used and how efficient and effective the resources were used, the costs incurred and the prices charged by the company previously. The human resource department should also be examined to establish issues in staffing and employees motivation. This is crucial to improve on production level and the quality of goods produced. Other internal aspects like perception of the company, time management, and availability of resources should also be looked into. After knowing the opportunities that the company could embrace, the threats that it faces, its strengths and weaknesses then the mission and vision of the warehouse should be reviewed in order ascertain whether they are still relevant or they should be changed. This helps in creation of both long-term and short-term goals. The goals set must be attainable as they dictate whether the vision of the warehouse can be attained. For example, a goal can be set to increase the rate of turnover by 37% at the end of one financial year. After setting up relevant attainable goals then measureable objectives aimed at attaining the goals set should be set up, for example, utilizing all the available resources effectively and efficiently including the idle machine as this will help improve production. The number of machine operators could also be reduced to reduce time wasting and then using part of the team in other departments, for example the sales department. When this is done and the employees are made aware of the objectives, team work improves and thus production and sales. A follow up to quantify the progress made to meet the objectives set should then start. This helps identify when a certain objective was fully met, what costs the company incurred to meet this objective and who helped in achieving the set objective. This can help in the reward process. Investment decisions are very crucial for a company. This financial decision making is also very difficult as it involves purchases of long-term fixed assets and short-term relocation of company funds. Different techniques are used for effective management of short-term cash and daily receipts. Financial techniques help one to develop insights and analysis of a company. One is able to learn of the competitors, customers and suppliers of a given company, the liquidity cash flow and performance of the company. It also enables one to integrate key metrics. In the case of Blackburn warehouse of the Cardboard Containers Limited using the cash flow analysis as a financial tool will be very effective as this enables a company know if funds needed to sustain it are available and if there is a shortage in capital. This will enable the company take the necessary measures to prevent its collapse. Cash flow analysis show the incomes anticipated in a given period and against the expenses. Excess of income over expenditure can be used for other investments and thus increase revenue. The company should also conduct an annual audit of their financial statements, this helps to find and correct recording errors. To make accurate calculations in the cash flow analysis, obtaining financial information is very important. Though, this may be difficult because the decline of the warehouse might have been caused by poor financial recording. In order to get this information, the manager will have to ask for three audited financial reports. This will help look at the financial trends and thus help fix any financial mistakes. This information can also be found in the company’s website. Dated bank receipts are also a good source of financial information. Financial information is very important for a new manager as it gives the necessary costs and expenses that the company incurs. Cost that can be done away with are also reflected in the information provided, therefore necessary steps are taken to do away with such costs. Because of this companies should ensure that all their financial reports are well kept as this makes it easy to retrieve this information in case of a financial crisis that needs to be addressed. After analyzing the external and internal environment of Blackburn warehouse key steps should be taken in order to meet the objectives and thus attain the set goals. In order to utilize the resources more raw materials should be obtained. This can only be done after ensuring there is a ready market for Blackburn warehouse products. To ensure a ready market, sales and marketing team have to be employed; therefore, more labor is required to be able to meet set objectives. The sales and marketing team need to be well trained in order to portray a good image of the company products. This promotes brand loyalty and thus creates market for the product. Going out to sell directly to consumers helps in making impulse buyers and undecided buyers to buy a company’s product. Once a ready market is created then the demand for a company’s products also increases. This forces the company in question in this case Blackburn warehouse to increase its production. This will ensure the utilization of the machine that lay idle. More machines will also be needed as production increases. As turnover rate increases then the company brings in new products and venture in other market segments. From the above, to help attain the set objectives more labor is required in order to strengthen the sales force, more machines are also needed to accommodate the increase in production, time as a resource will also have to be well utilized in order increase productivity. The company can introduce overtime and after some years night shift. As production increases, costs must be looked into. The company should try to do away with unnecessary costs as much as possible. Since many ways could be employed to attain the listed objective, the most effective and efficient method should be used. Project appraisal is necessary at this stage because it helps in identifying the best project before resources are allocated. These helps prevent using resources in inefficient projects that won’t be helpful in meeting the needs of the warehouse. This is an important decision making tool as it justifies spending money on a project. Appraisal also help in ensuring proper management of the project as appropriate financial controls and monitoring systems are put in place. In order to appraise the project for the Blackburn warehouse some steps have to be followed. The project has to pass through initial assessment. This looks at the project as a whole and the ideas in it. Blackburn project needs to increase production and sales while minimizing costs. The project has to be assessed to ascertain that it goes in line with the objectives of Blackburn. Then the problem of the warehouse has to be identified. Blackburn warehouse has in the recent days declined and some of the resources are lying idle. Something has to be done to ensure the warehouse does not collapse. The project designed has to be looked into to see whether it can solve the above problem and if it is efficient enough. After this then the appraisal team can consult people in different areas and levels. Local consultation helps determine priorities of the target market. This also helps get people’s views which can help improve the project. Consultation with the people who will use the project or rather those who work towards making the project a success is also important as this determines the viability of the project. Appropriate consultation is very important as it determines the shape the project will take. After this step the team then develops options. At this stage the concern is to find out whether there are different ways of attaining the set objectives. This always becomes quite complex and guidance may at times vary. Though all the options have to be reviewed and thoroughly looked into so as to choose the best option. After thorough comparison, the best method of getting to the objectives should be selected. It is important to ensure that all the necessary people and resources are in place to deliver the project. Internal and External Influences The Blackburn project is affected by some factors. This can be classified into internal and external factors. The internal factors include work relations and communication. There has been some as aspect of poor relations between this is mainly between the managers and the technicians. This poor work relations that have developed will make it difficult to work towards achieving the goals set. Communication has also been an issue in the warehouse as different group lack knowledge of how to address their issues. This will cause difficulties in carrying out the project. The external influences that affect the carrying out of the project include price fluctuations, government incentive, competition and location. Price fluctuation is important as it interferes with the budget. This can however affect it positively or negatively. When prices of raw materials go down then the cost of production goes down and therefore this helps increase revenue. When the raw materials’ prices rise then the cost of production is increased, thus generating low revenue. However, this can be catered for by increasing the prices of the products. The location of Blackburn has been very important in the past years as the place is easily accessible and therefore this will help boost the project. Resource Monitoring Systems have to be designed to monitor resources. These systems should ensure that any deviations from the objectives are corrected. Blackburn will put its employees into divisions or teams. This will apply to all departments. The teams will work as institutions on their own with a team leader answerable to Blackburn. The team leaders will be responsible of managing project resources and integrating activities to ensure planned outputs are achieved. This means implementation of the project will be done primarily through teams. Managing physical resources is not quite a challenge to Blackburn warehouse as its strategic position makes it enjoy a favorable environment to reach to the raw materials necessary to manufacture its products. The infrastructure is well established for distribution of its products. The warehouse house will only have to manage internal physical resources which are mainly the responsibility of employees. To monitor financial resources a system has to be put in place as this is important for the growth of the ware house. Blackburn will ensure the initiating of new activities. All the activities of the warehouse have to be prioritized to ensure finances are distributed according to priority to avoid wastage of funds. The new project will also ensure the filling of gaps and shortfalls in ongoing activities. This ensures that finances that were previously mismanaged are set straight and funds are allocated in places where there are actually needed. Surplus funds will be used in investments to ensure continued growth of the warehouse. Resource monitoring will involve all staff with a strong commitment from senior management. Any employee who mismanages resources will face punishment as prescribed by the management. Team managers will also play a major role in ensuring that their team members are responsible. Blackburn warehouse accounts will be audited at the end of each accounting period to ensure that all records are maintained and each cent is accounted for in the books of accounting. Sales and Marketing Plan In order for the project to succeed a sales and marketing plan has to be established. A good marketing can help retain existing and attract new customers. Blackburn has positioned itself as the cheapest packaging warehouse and as set aside some days every year where the prices of packaging are further subsidized. This has to be coupled by other integrated communication strategies like advertising and direct selling. In the set up project, Blackburn products will be advertised on televisions and certain newspapers. The company should set aside $300000 for the purpose of advertising this will also help reach many people in a short time. While advertising, the company has should hire advertisement agencies in order to help in developing the message that will be used in advertising on the media. Then a follow up should be conducted to find out how many people remember the advertisement and how many can remember its message. Direct selling is also important as much as it may seem challenging and thus an efficient sales plan has to be developed. This plan should help customers develop a strong urge to purchase the company’s products. In developing this plan one has to find opportunities in the market and differentiate that is on sale from competitors’ product. After seeking opportunities one should then try to explain the importance of a certain products. Blackburn sales force are trained on how to conduct themselves when they are in the field. The sales employees work on commission depending on how much they sell. This is meant to enable them to work harder. This in turn improves sales for Blackburn. By positioning the company as the cheapest in terms of prices, competitors can respond by lowering their prices too. This calls for action to counter competitors’ response in order to maintain sales of the product. Blackburn can position itself as best in quality in the industry this should be coupled by a packaging that portrays this. Report to the Managing Director To: The Managing Director, Cardboard Containers Limited From: The Project Manager, Blackburn warehouse Re: 9’ Pizza Box Line Dear sir This is to inform you that in order to achieve the objectives set, Blackburn settled on the best project. The project will help attain the goals of the company, thus leading to expansion. The project will start by recruitment of more staff and then training of both the existing and the new staff to equip them with the necessary skills to work on the project. The recruitment, selection and training process will cost the company around $1000. This is intended to be in January to give space for the project to start in February. In February production will remain constant as necessary repairs on the machines takes place. Repairs and servicing of the machines will cost the company around $50000 as most of the machines are in good condition. In the same month the sales and marketing team will be required to be more aggressive in order to win more customers to Blackburn. More customers will mean increase in demand of products. This will mean that production will have to increase to a point that all the existing machines are utilized. To counter surplus of demand over supply in April more machines will have to be bought, at this time the technicians will be more skilled and thus the number of operators for one machine will have to be reduced and some operators introduced to these machines. Training will continue as more machines are bought. Machines will be bought by part of the profit that remains after all the costs and expenses including salaries have been catered for. The company through the sales force should ensure that by the end of July it packages for most of the pizza companies around. Some machines will also be sold in order to buy newer machines that are up to date with the change in technology. With this expansion by the month of August the company should be able to venture to other markets. The main target is the coffee industry. Blackburn aims at packaging for Starbucks Coffee, a company that is well known for sourcing and roasting the best Arabica coffee worldwide. Other major coffee producing companies will also be targeted. This will help improve the image of Blackburn, therefore creating more business opportunities for the company. The more companies sign packaging contracts with Blackburn, the more the warehouse will expand and thus it will be forced to form other branches to enable it cater for the needs of all its customers. Branches can be formed after the approval from the overall management of Cardboard Containers Limited. These branches will help increase revenue for the company and profits at the end of every year. As at December Blackburn intends to have satisfied all the objectives set. Production will have increased as expected and the company should be well established in the market. With increase in production more people will be employed. Blackburn will expand to other places and as time continues venture into new products and markets other than pizza and coffee. Employees’ cooperation is very important in achieving the set objectives. The company should ensure the employees are motivated at all times. This can be done by giving bonuses to employees and at times dividing surplus profits to employees. A system of rewards can also be set up. This could be by taking the most hardworking employees to fully paid holidays. Budget Projection for 6 Months After assessing all the projects and looking into various previous accounting records, there developed the need to form a budget projection for six months that will help monitor the project. Cardboard Containers Limited (Blackburn Warehouse) in $ Receipts February March April May June July Sales 3000 3500 4000 5500 6000 6500 Capital introduced 140000 Total Receipts 143000 3500 4000 5500 6000 6500 Payments Wages 1500 1500 1500 1500 1500 1500 Spares Tools Electricity 150 150 150 150 150 150 Gas 85 85 85 85 85 85 Oil/Other 15 15 15 15 15 15 Machine Payment 40000 40000 40000 Total Pay 41750 1750 41750 1750 1750 41750 Open Balance 140000 101250 103000 65250 69000 73250 Closing Balance 101250 103000 65250 69000 73250 38000 The budget above is flexible as it is subject to both external and internal influences that affect the project. Blackburn’s employees must be taught on ethics and morals in order to help have efficiency and effectiveness in both production and selling. This will help the company stick to its budget and have only a few deviations which are inevitable. The project set up if executed properly will ensure that all goals are attained to propel the Cardboard Containers Limited towards attaining its vision. Read More